Corporate social responsibility statements are effective ways of ensuring multi-national companies act ethically. Discuss

For the past few years there has been lots of discussion about Corporate Social Responsibility. Most of the multinational companies issue every year a report on their practices. They try to get involved into communities, fight the poverty in the third world countries and donate millions of ponds every year to charities to as they say “build the better future”. But are their corporate social responsibility statements effective ways of ensuring that multinational entities act ethically? From my point of viewview, CSR statements do not ensure that practices of companies obey the rules of business ethics and I am going to present a few arguments for.

Corporate Social Responsibility is fairly recent termterm and maybe that is why there is no consistent definition for it. Most multinational companies use different terms in their reports, for example Shell defines it as ‘sustainable development’, Ford uses the phrase ‘connecting with society’, Diageo prefers the termterm ‘corporate citizenship’. All these expressions, although they have different meanings, are related to Corporate Social Responsibility but because of the proliferation of approaches, every company can put emphasis on something different, creating therefore complexity and confusion. What is more, the socially responsible company not only complies with minimum requirements of the law, but goes a step further and accepts social obligations beyond that.

The first argument for, that the CSR statements are not effective ways of ensuring that MNC act ethically is that belongingness to Global CompactCompact is voluntary. Furthermore, the companies cannot be sanctioned for not abiding CSR principles. The only penalty they can suffer from is bad publicity and destruction of image.